tv Real Money With Ali Velshi Al Jazeera June 22, 2014 7:00pm-7:31pm EDT
more news and updates though the evening. coming up at 8 o'clock, including an update on team u.s.'s game in portugal. there's a live look at rio de janeiro as world cup continues in brazil and around the world. i'm michael eaves, have a great evening. >> oil and water don't mitchell. that's why some communities don't want the oil pipeline if their backyard. can they stop them? no problem, for those who drive electric cars. and investment pioneers who scour the globe for the next big thing. i'll tell you about the risks and rewards of investing in frontier markets. i'm ali velshi. this is "real money."
this is "real money," you're the most important part of the story. tell me what's on your mind by tweeting @ali velshi. let's start with oil. we got another sign last week how dramatic fracking has transformed america's oil industry. north dakota produced a million barrels a day, safety and environmental concerns. i'm not just talking about shipping oil by rail or barge. the latest federal data shows appliance in the u.s. spill an average of 3.4 million gallons of hazardous liquids every year. including oil. and fear has families fighting
pipelines. that run through areas that supply drinking water. >> they're talking about bringing a crude oil pipeline through a densely populated area. we're 30 miles from times square. 12 million people live here. >> reporter: in towns throughout new york area, activists are banding together to fight against the pilgrim pipeline. the company's plan, building a pipeline from north dakota to new jersey. the proposed route will pass through a major water supply for millions for new york and new jersey. general plan tittle is the director of the new jersey sierra club. >> one of the concerns we have is if there's a leak or an explosion that it could jeopardize drinking water for more than a million people in new jersey. >> reporter: though largely invisible, roughly 186,000 miles of pipeline carry hazardous
liquids throughout the country. 17% run near drinking supplies. now people are fighting back. by far the loudest outcry stems from the proposed keystone pipeline. ranchers and vienlt environments are worried that it will threaten the ogalall-a aquifer. in april, the company opened a route passing within just two miles of the city's primary water supply. >> it's really an unknown danger in terms of how likely is there to be an extent? but accidents happen.
to the best people, accidents happen. >> with more crude than existing appliance can handle, oil companies have turned to trains, barges and trucks, to get their goods to market, often with tragic consequences. now, pipeline manufacturers are scrambling to catch up. despite public protests, companies like pilgrim insist theirs are the safest method of transport. in an e-mail to al jazeera, pilgrim's spokesperson said, an efficient means to transport these products than the region's current dependence on river barges. the spill risk for barges is almost seven times greater than appliance. >> we always say how safe they are. then ruptures or leaks the that go undetected for weeks
sometimes guess what, that's not a mistake, it's a disaster and a tragedy. >> among the worst accidents, michigan's kalamazoo river. 840,000 gallons of crude spilled into the water. warned others not to drink their water. and in 2011, disaster hit families in montana. a ruptured pipeline there dumped 63,000 gallons of crude into their drinking supply, the pristine yellowstone river. precautions to be taken for lines near waterways, many states do as well. and inspections are required every three years. but inspectors are calling on federal and state guidelines to do more. >> without proper environmental review, without proper public
notice or scrutiny, they are putting people at risk. whether on the yellowstone or in missouri. >> we contacted these people who oversee fimsa, that reblghts the design construction and operation of oil appliance. it also conducts periodic inspections. in an e-mail officials there said, quote, appliance are one of the safest ways to transport the high volumes of crude oil and other products that is right nation uses every day. let's examine the detail a little more. underground appliance are the safest options for the most part. >> rather than transporting over surface, they are not accident free as people have pointed out but all of these accidents or leaks are when the pipes and the appliance have not been --
pliens havpipelines have not ben inspected properly or maintained properly. in any of these environmentally sensitive areas, they have areas where they can actually put cases around the carrying pipelines to protect them even more. they are more difficult to inspect but they are inspected more properly, a year at a time. to make sure they are safe. >> putting a man on the moon decades ago, we can actually make pipelines that don't leak? >> yes, we can. and again, it's a matter of the construction. the handling of the pipes. the pipes have coatings on them to prevent croargs. but if you -- corrosion. but if you drop a load of pipes and damage that protection then you'll have a problem. also the welds, every time you connect a piece of pipe, you
need to make sure those welds are done correctly. that's where we should focus our energy is making sure everything we put into the grounden is going to meet regulations even before it goes into the ground. >> there are disputed studies indicating that certain oil, some of this oil that comes from north dakota, particularly the oil that comes from canada some is more corrosive as it goes through the pipes, the oil sands oil. where do you stand on this? i've heard studies on both sides. >> well, no matter what your product you're pushing through a pipe. you can have corrosive products. and you design the pipe to handle those particular corrosive products. if you have something that's particularly corrosive you would have different coatings inside the pipes to handle that. normally, one product is moved through a particularly type of pipeline and only certain products will move through that pipeline that actually meet the standards of the coatings that will protect it from corrosion.
>> you know a lot of the issue around the xl pipeline is as mary said it goes around the oglala. this pilgrim's pipeline goods through an aquifer, given the politics, it wasn't always there but given the fact that it's there, why doesn't these pipeline companies route it around these areas? >> you know the shortest line is a straight line and it's cheaper to maintain a straight line. it's also some of these areas you know you're going to have open woods, wooded areas and catchment areas that don't have a lot of population around there so they're avoiding population by cutting through some of these areas. and you can also design it in ways where if there is a spill, it could be abated quickly so you could keep it out of the watershed. the oglala watershed aquifer has
more threats to it from overproduction and from fertilizers and pesticides that are dropped all over the ag aquifer area. that's the biggest risk to that aquifer, not appliance. and there are thousands of miles of pipelines that -- not pipelines. and there are thousands of miles of pipelines that cross that area 98. >> don, thank you. >> if we are not limited, if it has a stock exchange we want to be had. >> beware of the one trick pony. i'll have the frontier markets, coming up. should juvenile killers serve life without parole? >> the didn't even ask for the money they just shot him. >> horrendous crimes committed by kids. >> i think that at sixteen it's a little too early to write him off for life. >> should they be locked away
>> investor everies are always g for the next big thing. they search the world to the farthest reaches of the globe. i'm talking about places the rest of us would consider way too risky to plant our money. these risky developing countries are known as frontier markets. they are one step riskier than the so-called emerging markets. barry snowy has the story.
>> just as america's wild west once held the riches of pioneers, countries from vietnam to algiers, david grayson scoured the globe searching for next big thing on the financial frontier. >> we look everywhere for investments. we're not interested in the political outlook, if it has an investment market we wanting to be there. >> as small as mauritius, population 1.3 million. they lack behind u.s., u.k. and japan, and they are behind emerging markets. but as emerging market economies like russia slow, investors are
seeing strong returns in frontier markets. so far this year frontier markets are up 17.7%, emerging markets are up 4.6% and the s&p 500 is up 5.4%. among the standouts, nigeria. its market is up 93.4% in the last two years. investors are attracted to its growing population and growing industry. the market cap is roughly $140 billion compared to $3.7 trillion in emerging markets and they carry risk. in 2011, frontier markets lost 18% and in 2008, they dropped 54% compared to the s&p 500's 37% fall. there are also political risks. take the case of argentina. >> there is the are risk that they will nationalize or take assets. the state will take assets from private investors or international companies.
so risks like that are not necessarily common but more likely in frontier markets, compared to the emerging markets. >> when considering to invest in a country, breweries are another. >> there are a lot of cases where you have subsidiaries of multinational companies listed in the local market whether it be nigeria, bangladesh or vietnam. knowing you have the quality of management in europe for the u.s. >> david grayson says he's learned how to shrug off ominous headlines. sierra leone is now on his list of promising economies with the stock market open only one day a week. >> we want to be prepared for the time the government decides they are actually going to start to privatize the companies and we're ready to take investors in
to show them the way. >> it's taking the chance on a possibility. mary snowy, al jazeera. >> the index that measures them the morgan stanley capital market, qatar uae left. emerging market status analysts say part of the reason frontier markets were doing so well is because qatar and uae had big gains in that market. >> co-author of the book winning in emerging markets, the road map for strategy and execution, he said these exotic funds are only for those with nerves are steel. >> you could have returns of minus 30% plus 50% minus 12% and so on, so forth. so it really is something for sophisticated investor or somebody who has a little bit of money to play with through a
specialized agent. >> bricks, brazil, india, china, how do you distinguish between an emerging market and a frontier market? >> it's a matter of degree. think of an emerging market as an adolescent and a frontier market as a baby and adults, you and me, frontier market if it ever gets its institutions mature enough, will graduate to emerging markets and sometimes into developed markets. united states was at one point an emerging market in one sense. it's a question of degree and it takes time. it just takes a lot longer than most people think. >> one of the things you warn against is markets as hot as they are that are too concentrated as you call them,
one trick ponies. tell us about that. >> people often ask, how do you know when weather a frontier market is going to transition into an emerging market. there is a couple of signposts that i look for. are you decentralizing power? if all of the powers are in the hands of a couple of croneies, that's a bad sign. that would be closer to a frontier market. if things get rooted in and the rule of law sets in, that's a good sign. good sign post you can look for quite easily. the other is transitioning is as you said from a one trick pony which is an economy that's completely dependent on one sector. if the economy is unable to diversify, and get more than one
flower in a bouquet of offerings, it's a bad strike, because markets could derail that in many ways. >> i was surprised to understand you thought myanmar is one of those emerging markets. >> the generals in myanmar are starting to withdraw. they are jock for power going on, ethnic tensions in old burma with myanmar, bangt and trying to deal with the r-oh rvetion nirvetiondra population. i know of investor cohorts that are going in from india, southeast asia, europe. multinationals are starting to invest, consumer goods. when i look at it. i see the telltale signs, little
signposts along that journey to begin institutional maturity. that's far from saying my grandmother should invest in it. but it's interesting to watch. >> tarin, we hope you'll come back. >> thank you, ali, any time. >> i'm going to take you to one city where they're experiencing pedal to the metal growth. that's up next.
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>> sales of electric vehicles are still just a sliver of the roughly 16 million cars and trucks sold in the united states every year. of all the vehicles registered in america electrics make up less than one half 1%. but in some area, sales are picking up speed. and it might not surprise you to learn that nine out of the ten sales of leks ar electricless ae west coast. financial incentives are too generous. >> in the deep south a growing number of people are ditching their ga gas guzzlers and going electric. >> i don't have any maintenance on the cars. there isn't an oil change every 3,000 miles or anything like that. >> denny commutes in the sprawling metropolis of atlanta. earlier this year he bought this electric car, a nissan leaf.
>> whawhat does it cost to you charge this car a month? >> it's approximately $20 a month. >> the main utility company here georgia power offers a special off-peak rate for plug-in charging. that's 10% less than the national average. >> so roughly per year i'm saving approximately $4,000 a year on energy cost because i'm not purchasing gas. >> less than 2% of the vehicles here on the roads here in atlanta are electric. but that's higher than average. you start to see charging stations in a parking lot like this near a grocery store. >> that's no surprise to ryan whiteman. >> we are selling more and more i can't get enough of them. >> over 50,000 leafs have been sold in the u.s. and 110,000
worldwide. the average sticker price, just over $30,000. but some georgia lawmakers are concerned by the rising costs of electric car subsidies and they want to phase out the tax credit. georgia representative cuc martin is one of them. -- chuck martin is one of them. there are times to boot strap a technology if that is for the greater good. but at some point where a subsidy on a two year lease makes it essentially free, i think that is too generous and not good policy. atlanta city hall could not disagree more. >> one, the incentives absolutely help. and the second thing is that atlanta loves technology. and so here is an opportunity for us to really take advantage of it. it works for us. you're seeing individuals reduce their overall operational cost. >> reporter: atlanta is second in sales only to san francisco in the u.s. an electric car driver danny would like to see more public charging stations. he says this is only the beginning of a fast-moving
trend. >> i think technology is going to get a lot better. there are other car companies besides nissan so there's going to be more competition. and i think the range range is y going to get better. cheaper alternative as far as our energy cost. >> tesla, chevy and bmw, ford and other car makers are going make similar ones. the question is, whether sales growth can continue accelerating even when opposition is putting on the brakes. robert ray, al jazeera, atlanta. >> tesla kerry elon musk is giving his idea for free. vast array of technology patents available to the public, part of a bold move to speed up the emergence of electric vehicles.
electric cars becoming more mainstream regardless of what company makes him. chris woodward, i asked him what's behind this. >> he thinks this will spur more interest in electric cars moreover. he doesn't think tesla is giving up much by giving up its patents. it's going okeep innovating, staying ahead of its patents. >> i believe that on elon musk. what is the problem? >> the chicken and the egg problem. you need to approach it on both ends. we need enough high mileage models out there where consumers will say wow, that's terrific. and we need more models that get more than 150 to 200 miles per charge. >> i would have thought at 3.50 or $4 a gallon for gas that would be enough of a tipping point. but americans get used to this very easily. if oil price go up again, that's
sometimes prompting people into it. the price of gas combined with incentives that are offered by given states or like we heard, atlanta. >> every single time we've seen a big spike in the price of gas, electric vehicle sales and hybrid sales and plug-in assets go right along with it. >> who's got the edge on electric cars? >> it's kind of a three-car race. tesla is making a mark, nissan leaf, and chevy voalt, whic vola plug-in and a backup gasoline engine. >> as there's more infrastructure, fully electric vehicles will do better than the volt. the volt is the one you use if you want a hedge, you don't know if you want a charger and it's got a gas engine. >> most people believe that's the way it's going to go.
they're not believers, and chrysler said don't buy our 500 e fiat, because they lose money on every one they sell. >> thank you for joining us. >> thank you, ali. >> several important reports will tell us how the market has been faring, if you are buying or selling a home or thinking of doing so any time soon you'll want to know what's going on in your neighborhood. that's on "real money." that is my show today, i'm ali velshi. thank you for joining us. >> tonight on al jazeera america at 8, primetime news. our fearless journalists bring you ground breaking reports from around the world, and here at home. >> this has been one of the hottest of the hotspots... >> then at 9, it's al jazeera america presents... the system with joe burlinger >> a justice system run by human
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